Northrop Grumman Corporation (NOC), Textron Inc. (TXT): Aerospace and Defense Companies Battling it Out

Page 1 of 2

The global Aerospace and Defense, or A&D, Industry is expected to grow at a rate of around 2.5% over the period of 2012-2015 to reach $544.7 billion. The companies in this sector are striving hard to cash in on the underlying growth opportunities, and in order to gain most are entering into joint ventures and signing more contracts. A&D companies have growth potential, and they are adopting distinct strategies to build a stronger presence in the market. Let’s check out how these strategies will work for these companies?

Northrop Grumman Corporation (NYSE:NOC)Northrop Grumman Corporation (NYSE:NOC)Northrop Grumman Corporation (NYSE:NOC)

New contract generating higher growth opportunities

Recently, Northrop Grumman Corporation (NYSE:NOC)’s Scalable Agile Beam Radar, or SABR, was selected by Lockheed Martin for upgrading and modernizing radars on the F-16 fighter aircraft of the U.S. Air Force. This upgraded radar will add unique operational capabilities to the widely used fourth-generation F-16 fighter aircraft. This program falls under Northrop Grumman Corporation (NYSE:NOC)’s Electronic segments sectors. SABR active electronically scanned array, or AESA, is the newest airborne fire control radar, which improves the F-16 aircraft’s attacking efficiency by enabling it to identify and detect targets with high-resolution synthetic-aperture radar, or SAR, maps, and electronic protection. It is expected that by developing this radar, Northrop Grumman Corporation (NYSE:NOC)’s electronic systems segment may generate the revenue of more than $7.13 billion this year from $6.95 last year with year-over-year growth of around 2.6%.

The company is providing the network and integration services under the Distribution Mission Operations Network, or DMON, service contract to the U.S. Air Force. It recently received the contract of $490 million to continue its DMON services for the next five years, which could potentially extend to 2023. DMON allows various aircraft platforms located around the world to operate and train warfighter pilots together in virtual conditions. The company has been supporting war-fighter training for more than ten years, and Northrop Grumman Corporation (NYSE:NOC) innovated it DMON services, making it more powerful, efficient, and affordable.

Last year, the company extended the network area of DMON to additional Air Force platforms and extended capabilities to realize the potential of virtual and cost-effective training. Therefore, it is expected the company may continue to receive extension requests from the U.S. Air Force for its DMON services in the future. Due to the contract, Northrop Grumman Corporation (NYSE:NOC) raised its revenue guidance by around $300 million to $24.3 billion for this year.

Joint venture driving future revenue

In June, Textron Inc. (NYSE:TXT) won the five-year contract worth $6.5 billion from the U.S. Naval Air Systems Command, or NAVAIR, due to the Bell The Boeing Company (NYSE:BA) V-22 program, a 50:50 joint venture between its subsidiary Bell Helicopter and The Boeing Company (NYSE:BA).

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Largest Pharmaceutical Companies In the World

The 10 Most Expensive Android Apps

The 9 Most Expensive Designer Bags in the World

The 7 Most Expensive Real Estate in the World

The 10 Most Expensive eBay Items Ever Sold

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!